This document summarizes key points about legal department convergence processes from the perspectives of both in-house counsel and outside law firms. It discusses how convergence began as a trend started by DuPont in the 1990s to reduce the number of outside law firms used. Legal departments use convergence to better manage budgets, build stronger relationships with fewer firms, and implement performance metrics. Both in-house counsel and law firms must be clear on objectives, use data to inform decisions, and view interviews and implementation as important parts of the process. Overall, the document provides advice for effectively navigating convergence from both sides of the relationship between legal departments and outside counsel.

1. Convergence From the
T w o V e t e r a n s L o o k a t a n E v o l v i n g T r e n d
InsidEAndOut:

2. By Joseph Perkins and Jay Felton
“Convergence,” which means to consolidate
legal work to a smaller cadre of law firms, was
first popularized by DuPont in the 1990s and
was subsequently adopted by many companies
around the world. Legal departments have
been motivated to run convergence processes
in order to better manage their outside
counsel budgets, leverage their spend, build
stronger relationships with fewer law firms,
and to implement performance and quality
metrics for their outside counsel.
CHEAT SHEET
■ Know your objective. Companies
don’t do this once and stop; the
process is ongoing and evolving.
It’s important for both sides to be
clear about each party’s goals.
■ Face time. Both data and
face-to-face interviews will
shape the selection process.
Procurement staff can be helpful
with RFPs, but in the end, it’s
lawyers who will call the shots.
■ Reset button. Once the contracts
are signed, both sides need to
have their teams in place and
ready to get down to business.
Even for companies and law
firms who’ve done business
in the past, convergence
can be a “reset button.”
■ Talk often. The process can help
increase diversity, save money
and build closer relationships.
They key to those goals is
effective communication,
so performance issues can
be addressed early.
ACC DOCKET JUNE 2015 47

3. Two things are clear. First, the conver-
gence process is here to stay. Second,
the process is continuously evolving —
a company doesn’t do it once and stop.
Over the last several years we have
each worked on convergence projects
(one of us from the inside and the
other from the outside). Whether you
are in a company that is considering a
convergence project for the first time,
a company working on a new round of
convergence, or in a law firm preparing
for convergence, here are 10 points for
you to consider — from the perspective
of both in-house and outside counsel.
1. It’s going to take longer
than you think.
Inside: Running a convergence process
is time-consuming. In-house legal
teams have many demands on their
time. A thorough convergence is going
to include developing a project plan,
identifying how the company uses
outside counsel, developing a process for
requests for proposal (RFP), identify-
ing the firms that will receive the RFP,
reviewing and scoring of RFP responses,
and ultimately, selecting the panel of law
firms. For busy lawyers, running a con-
vergence project can seem like taking on
a second job as a procurement specialist.
Out: The good news here is the
longer the process takes, the longer
you remain in the game. The key is to
devote all the time necessary up front
to understanding the company’s goals
and key metrics. Take the time to know
your client (or potential client) and to
study your own firm. Many companies
have informational calls and webinars
to go over the process and answer
questions. These meetings are vital and
should not be delegated. The rela-
tionship partner should be front and
center. You need to know the targets
before you prepare your proposal.
2. Be clear about what your
objective is for convergence.
Inside: Legal departments need
to think strategically about their
convergence objectives. For example,
is your primary goal to reduce the
overall number of firms you work
with? Perhaps your legal department
wants to track its outside counsel
spend more closely, and improve its
ability to forecast legal expenses. Some
legal departments may decide to use
less Big Law representation, and focus
on law firms with regional or specific
subject matter expertise. Regardless of
the motivations, be clear about what
goals you want a convergence process
to accomplish. The RFP and selec-
tion process should support your legal
department’s objectives.
Out: Listen carefully. Most companies
will tell you what they are after, if you lis-
ten. If the company’s goals are not clear,
do not be afraid to ask questions. Your
firm’s competitive position can vary de-
pending on how you align yourself with
the client’s objectives. Your approach
should also be specifically tailored to the
type of convergence being considered
which may be a major convergence (like
DuPont going from 350 law firms to 41),
a super-convergence (some Fortune 500
companies have reduced their outside
firms to single digits), a practice area
convergence (for example, product liabil-
ity litigation), a geographic convergence
(which involves splitting the country into
regions where a firm or firms will be the
primary outside counsel) or some com-
bination of these approaches. If you want
to compete in a convergence process, it
is vital to understand what the objectives
are as well as what is not part of conver-
gence (e.g., certain practice areas might
be exempted).
3. Data is your friend.
Inside: Just like other strategic initia-
tives, your convergence process should
be driven by data. One of the initial
steps should be to thoroughly analyze
how much your company spends on
outside counsel. A good measure is
how much you spent with each law
firm over the past three fiscal years.
Identify trends in your spending and in
what subject areas you spend the most.
Your analysis may be eye opening. For
example, if your company has seen a
surge in fees for employment and labor
matters, this will tell you that you need
to place an emphasis on employment
and labor talent among your law firms.
The data you gather should go
beyond the financial cost. Examples
of other issues you should consider
include how many lawyers your out-
side law firms typically use for each
issue, how much partner time versus
associate time is devoted to your
matters, and whether firms write off
large amounts of attorney time. You
should also look at trends which affect
your need for outside legal services.
For example, you may be experienc-
ing a spike in trademark enforcement.
Maybe you determine that you need
a new regional expert because you
are tracking an increase in wage and
hour claims at your new facility in
California, but your go-to labor and
employment law firm is based in North
Carolina. Perhaps your company has
expanded its operations in other coun-
tries, requiring an increase in trade
compliance expertise or immigration
expertise. The more data you gather
Joseph Perkins is vice president, general counsel and secretary of NIBCO Inc. He is also on the
leadership team of ACC’s International Legal Affairs Committee.
perkinsj@nibco.com
Jay Felton is a litigation partner at Lathrop Gage with 20 years of experience representing
Fortune 500 companies, and has been a driving force behind his firm’s commitment to the ACC
Value Challenge. jfelton@lathropgage.com
48 ASSOCIATION OF CORPORATE COUNSEL
CONVERGENCE FROM THE INSIDE AND OUT: TWO VETERANS LOOK AT AN EVOLVING TREND

4. about your outside counsel usage and
developing legal needs, the better your
RFP questions and decision-making
will be.
Out: If you are dealing with an exist-
ing client, then you go into the process
knowing how you might be able to
effectively manage costs on the work
in play. If that is the case, your histori-
cal information is a huge advantage.
Use it to model future work, set your
staff (over the life of the contract), and
determine your break-even rates and
fee structure. Some companies will even
ask for this information. Be ready with
that information if they ask for it — and
provide hard historical numbers. If you
want to truly partner with your client,
you need to act like a partner. In the
end, for your firm, the bottom line is the
bottom line — know your break-even
point and then make a business deci-
sion on the kind of margin you need in
order to earn or keep the work.
4. Face-to-face interviews are
valuable to the process.
Inside: In-person interviews are a
useful tool in the selection process.
Interviews are particularly helpful if
you are trying to decide whether to
engage a firm that you haven’t used.
To the extent possible, the interview
setting should be relaxed. It should
not have the tone of “us” versus
“them.” After all, your legal depart-
ment is looking to build stronger
relationships with the law firms you
select. Give the law firm notice of
the topics you want to discuss in the
interview as well. This will help the
in-house team stay focused on the
information you want to gain in the
interview, and it helps the outside law
firm identify the right team members
to bring to the interview.
One additional point: Don’t in-
terview a firm that you have already
decided will be successful in the RFP
process. The interview should be used
for clarifications and gathering ad-
ditional information.
Out: Most interviews involve teams.
To put together the right team, know
whom the clients want to see and what
topics they want addressed. Again,
if you are not sure what topics will
be addressed — ask. A good rule of
thumb is that an existing client should
not meet anyone new at a convergence
interview. Regardless, make sure that
everyone who attends for your team
has something to contribute. This
will require preparation and involve
a significant investment of time and
energy on your part but it is an invest-
ment you have to make to remain
competitive.
5. Procurement input can be helpful,
but legal owns the process.
Inside: In recent years, quite a bit has
been written about the role of pro-
curement staff in legal convergence
processes. The legal and procurement
departments should clearly define their
roles and responsibilities up front.
Attorneys are the functional experts
on how to select the most appropriate
legal counsel to meet your company’s
business needs. The procurement team
has the functional expertise to run ef-
ficient RFP processes for the selection
of outside vendors. A well-structured
approach, with the legal team leading
the process, will help legal and pro-
curement employees work together to
obtain the best results for the company.
Further, if the legal team sets fee guide-
lines, procurement staff can effectively
negotiate the fee structure used by the
law firms selected in the RFP process.
Out: Understand that there is an
ongoing wrestling match in many
companies between the legal and
procurement teams over which group
controls legal spending. It is generally
easy to see the procurement questions
in the convergence packet. Give those
questions the same consideration as
questions from the legal team. The
key for outside counsel is to give each
question (and each team) equal weight
and stay out of the spending scrum.
In the end, legal departments almost
always retain control over outside
counsel, but procurement remains a
vital part of the process.
6. Create an effective plan
for implementation.
Inside: After firms are selected, set up
a strong plan to control and manage
implementation. For example, create
internal rules which require the use of
approved law firms. Establish a clear
set of billing guidelines. Generate regu-
lar reports to monitor fees and spend-
ing to ensure that law firms are follow-
ing the newly negotiated fee structure.
Require communication between the
legal department and the engagement
partner of the law firm so issues can
be addressed in real time. Think about
the objectives you identified for your
convergence process. Your control plan
should measure whether your legal de-
partment is achieving those objectives.
Out: It is absolutely essential that
the team you promised is ready and
in place if you prevail. Stumbling out
of the gate can be fatal. In addition,
be ready for new forms, budgeting
requirements and processes — even
for clients you have represented for
years. Convergence is a whole new
game and can be a reset button for law
departments. If you promise a specific
partner/team, be ready to deliver that
team from the start. Firms that try the
bait and switch approach are doomed.
If you promise project management
Don’t interview a firm
that you have already
decided will be
successful in the RFP
process. The interview
should be used for
clarifications and
gathering additional
information.
ACC DOCKET JUNE 2015 49

5. More and more, in-
house legal teams are
demanding that outside
legal representation
is diverse, and legal
departments and
outside firms can
use convergence as
a way to partner on
these initiatives.
personnel — have them ready to go,
just like your lawyers. The same goes
for gathering and reporting metrics.
For example, if you promise to provide
a discount at a certain level — track it
and honor it.
7. Use convergence to
cultivate diversity.
Inside: More and more, in-house legal
teams are demanding that outside legal
representation is diverse, and legal
departments and outside firms can use
convergence as a way to partner on
these initiatives. Many corporations
have diversity procurement targets
which apply not only to their suppliers
of raw materials. Procurement targets
often apply to legal services. Legal de-
partments can set goals for the percent-
age of their legal work being performed
by diverse lawyers. Diversity metrics
may also be used to evaluate the overall
performance of the law firm.
Out: Once again, it is important
to know the company’s specific goals
(primary and secondary) for the
convergence process. Diversity is often
one of those goals. If this is an existing
client and you do not have a diverse
team already in place, or you cannot
field a diverse team in a specific area,
acknowledge it and be clear about how
you will work to put the right team
forward. It is also important to show
ways in which your existing diversity
is meaningful and that you have a
process in place to build and expand
your diversity efforts.
8. Leverage your spending.
Inside: Legal departments continue to
be under pressure to do more with less
and reduce outside counsel budgets. A
convergence process can certainly help
legal departments decrease costs by
providing more work to fewer law firms
at negotiated rates. Legal departments
can also use their convergence process
to negotiate alternative fee arrangements
such as flat fees, blended rates, and vol-
ume discounts. Selected law firms may
be required to offer a certain amount of
value add services such as training, or
lawyer secondments. Law firms may also
be asked to offer some of its resources
— such as electronic data rooms — at
reduced rates. Legal spend can also be
managed by establishing a pool of hours
which are billed at a reduced rate which
in-house lawyers can use for a quick
phone call to the firm. Legal depart-
ments and law firms can be creative
in how they allow legal departments
to cost-effectively use certain law firm
services, while also allowing law firms to
generate revenue for those services.
Out: Companies demand outstand-
ing service, quality and results at the
most cost-effective rate possible. The
key for a law firm is to determine what
that team should look like. Some firms
do this with dedicated teams who
know the client and its business and
use that knowledge to increase effi-
ciency. Other firms bring in staff attor-
neys and increase the use of paralegals.
The former is clearly preferred, but the
latter can become a necessity if the rate
structure dictated by the process cuts
too deeply into the firm’s margin.
Keep in mind how your firm can
add value to the partnership. Some
examples include offering alternative
billing proposals, such as blended
rates or tiered discounts, providing
free research, and conducting in-
house CLE seminars. Be creative in
your proposals.
9. Build stronger professional
relationships.
Inside: Using a smaller number of
firms provides the opportunity to
spend more time with fewer outside
lawyers. This helps outside lawyers
learn more about the company’s strat-
egy and risk-tolerance, making them
more effective legal counselors. In-
house lawyers can also make sure that
the outside firm is developing a deeper
pool of talent that will focus more of its
time on the company’s matters.
By contrast, relationships can be put
to the test if a law firm fails to meet
the expectations of the in-house legal
department. With fewer firms, a poorly
performing law firm can have a big
impact on a corporate legal depart-
ment, and even increase risk to the
company. If the relationship is strong, a
legal department will raise the per-
formance issue promptly with the law
firm engagement partner. The partner
should address the issue right away.
But, sometimes, a legal department
must acknowledge that it simply did
not choose well even though it ran a
thorough convergence process. In those
instances, the legal department needs
to act in the best interest of the com-
pany, which could mean disengaging
from the poorly performing law firm.
Out: One great way for law firms
to attract and retain legal talent is
providing opportunities to really get
to know and work with Fortune 1000
companies. These companies generally
have a consistent flow of work, which
is typically complex, challenging and
very interesting — the kind of work
lawyers love to do. Convergence also
allows outside counsel to build long-
term professional relationships with
in-house lawyers, another attractive
opportunity for prospective talent.
10. Communicate, communicate,
communicate.
Inside: Set up regular feedback ses-
sions with panel law firms to help build
the post-convergence relationship.
50 ASSOCIATION OF CORPORATE COUNSEL
CONVERGENCE FROM THE INSIDE AND OUT: TWO VETERANS LOOK AT AN EVOLVING TREND

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7. The most effective feedback sessions
happen face-to-face, and at regular
intervals. Having an annual law firm
review may sound good, but an annual
review may allow issues to linger and
not be addressed in a timely manner.
Having reviews twice per year may be
the ideal frequency for law firm perfor-
mance feedback. If you hold a mid-
year review by video conference, and
an annual review in person, you will be
providing real time feedback to your
law firms. Legal departments can use
these sessions to clearly communicate
how they are measuring the law firm’s
performance. By keeping the channels
of communication open, in-house law-
yers can identify and address perfor-
mance issues sooner and possibly stave
off larger problems down the road. In
addition, law firms should remember
that these meetings are a good time to
make sure that associates get exposure
to their clients.
Out: Most companies have monthly
and quarterly reports. Use these to
supplement the day-to-day com-
munication for ongoing cases and
projects. In addition to these reports,
go see your client. Do not wait until
the annual review to see a performance
evaluation or to receive constructive
criticism on how you can better serve
the client. Also encourage the client
to hold regular meetings for conver-
gence counsel — either at the client’s
headquarters or at events like ACC’s
Annual Meeting. It is important that
panel counsel cooperate and coordi-
nate whenever possible.
Conclusion
The convergence process is a great
tool for lawyers. From an in-house
perspective, it is a chance to see what
your current outside counsel has to of-
fer; put potential new outside counsel
through their paces; and, regardless,
consolidate your legal work in a way to
increase quality and efficiency. From
an outside counsel perspective, it is
an opportunity for you to show your
existing clients how much you know
and value their business; potentially
develop new business if you are not yet
a panel counsel; and take a new, fresh
look at how to best serve your clients.
It is a process to embrace, not dread,
and one that is here to stay. ACC
For a more detailed description of con-
vergence, see ACC’s checklist at
www.acc.com/advocacy/topten_sep08.
If you hold a mid-
year review by video
conference, and
an annual review
in person, you will
be providing real
time feedback to
your law firms.
52 ASSOCIATION OF CORPORATE COUNSEL
HAVE A COMMENT ON THIS ARTICLE? VISIT ACC’S BLOG AT WWW.INHOUSEACCESS.COM/ACC-DOCKET.
ACC EXTRAS ON… Convergence programs
Leading Practices Profiles
Converging External Counsel: Leading
Practices in Selecting, Implementing and
Managing a Value-Driven Preferred Network
(Mar. 2015). www.acc.com/lpp/covergence_
mar15
Leading Practices in Law Department Staffing:
Allocating Internal and External, Lawyer
and Non-Lawyer Resources to Drive Value
(Oct. 2014). www.acc.com/lpp/staffing_oct14
Program Materials
Drive Value Through Convergence, Value-
Based Fees Other Innovations (Oct. 2013).
www.acc.com/pm/convergence_oct13
Competitive Collaboration (Oct. 2013).
www.acc.com/pm/collaboration_oct13
ACC HAS MORE MATERIAL ON THIS SUBJECT
ON OUR WEBSITE. VISIT WWW.ACC.COM,
WHERE YOU CAN BROWSE OUR RESOURCES BY
PRACTICE AREA OR SEARCH BY KEYWORD.

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